An Introduction to Innovation for small businesses. For a FREE downloadable version please visit www.incrementa.co.uk

1. Introduction to Innovation
Where do new ideas come from

2. What links these individuals?

3. And who is the odd one out

4. The Candle Problem
Pa
ge
4
You have a candle, a box of
thumbtacks, and a book of matches,
and are tasked to affix the lit candle to
the wall so that it will not drip wax
onto the table below.

5. Innovation
What is Creativity?
Creativity Bringing into existence an idea that is new to
you
Innovation
The practical application of creative ideas
Creative
Thinking
An innate talent one is born with and a set of skills
that can be learned, developed and utilised in daily
problem solving

6. Don’t Believe the Experts !
“That’s an amazing invention, but who would ever want to
use one of them?” (US President Rutherford B. Hayes, after
participating in a trial telephone conversation between Washington and
Philadelphia in 1876).
“Television won’t be able to hold onto any market it
captures after the first six months. People will soon get
tired of staring into a box every night (Darryl F. Zanuck, Head of
20th Century Fox, 1946)

7. Don’t Believe the Experts !
“The horse is here to stay, but the automobile is
only a novelty, a fad” (President of Michigan Savings Bank,
1903, advising Henry Ford’s lawyer not to invest in the Ford Motor
Company – disregarding the advice, he invested $ 5,000 in stock, which
he sold several years later for $ 12,5 million).
“I think there is a world market for about five
computers (Thomas J. Watson Sr., Chairman of IBM, 1943)

8. Types of Innovation
• Business Model Innovation involves changing the way business is done in
terms of capturing value
• Process Innovation involves the implementation of a new or significantly
improved production or delivery method.
• Product Innovation involves the introduction of a new good or service that is
new or substantially improved. This might include improvements in functional
characteristics, technical abilities, ease of use, or any other dimension.
• Service Innovation is similar to product innovation except that the innovation
relates to services rather than to products

9. Types of Innovation
• Radical Innovation involves major changes culminating in either
a entirely new product or servicing customer needs in a new
way

10. The innovation in the dual-cyclone vacuum cleaner came from applying
industrial dust extract technology to domestic vacuum cleaners.
James Dyson had the idea when he installed an industrial dust extraction
system incorporating a large, 30 foot high cyclone dust extractor to
remove excess powder from the atmosphere in a powder coating plant.
As James Dyson himself describes it: “It occurred to me at that moment
that there really was no reason why it should not work in miniature –
using a cyclone about the size of say a Perrier bottle”.
James Dyson and the vacuum cleaner

11. Types of Innovation
• Incremental
innovation involves
making continual
improvements to
existing products or
services
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11

12. Creativity Screening Innovation
Inputs
•Ideas
•Daydreaming
•Observing
•Brainstorming
Outputs
•Better
•Faster
•Cheaper
•Aesthetic
Criteria
of evaluation
Relationship between creativity and innovation

13. Blocks and Blockbusters to Creativity
Following the rules Breaking the rules
Making assumptions Checking assumptions

14. Blocks and Blockbusters to Creativity
Fear of failure Risk-taking culture
Over-reliance on logic
Use imagination and
intuition

15. Barriers to Creativity
• Resistance to change: people just get used to doing a particular work in
customized manner and they are just opposed to any new idea or change.
• Lack of initiative: organizational managers from top to bottom are just opposed
to giving initiative to their subordinates fearing that it will undermine their
authority.
• Restriction on interaction: a free and open environment provides members an
opportunity to interact with members of their own and other groups. Such
interaction facilitates exchange of ideas and information required for creative
work where as in restricted environment creativity is adversely effected.

16. Barriers to Creativity
• Fear of something going wrong: many new ideas may go wrong or prove
impractical. Whenever creative work is to be undertaken the possibility of
success or failure is always there.
• Lack of recognition: failure to recognize or reward creativity acts as de
motivating factor. Hard work put in by creative people must be compensated
with adequate financial and non financial rewards.
• Resource constraints: creativity demands sufficient availability of resources.
Absence of adequate resources may dampen the spirit of creativity.

17. What prompts innovation?
What
prompts
innovation?
Customers
(Unmet
needs)
Gaps in the
Market
New
Technologies
Performance
Failures
New insights
and ideas
Cost and
Efficiency
Savings

18. Sources of New Ideas
• Basic research: all firms are engaged in some kind of basic research and
development , which can lead to development of new product ideas that have
already passed the initial screening stage.
• Production stage: workers actively engaged in the production of products can
suggest certain modifications and improvements. These workers can provide
ideas aimed at improving quality, cost and performance of potential product.
• Sales force: sales representative are directly in touch with the customers and
are thus better equipped to take note of customer needs by this they can
provide better product development idea.
• Buyers: an entrepreneur while keeping track of the requirements of the
consumers can definitely get useful ideas aimed at developing a better
product.

19. George de Mestral was a Swiss engineer. Returning from a walk in the forest one
day he noticed cockleburs sticking to his dog’s coat. Intrigued, he put a cocklebur
under a microscope and noticed that the surface consisted of thousands of tiny
hooks that readily stuck to tiny loops in his clothing. Having noticed that zip
fasteners often had a habit of sticking he wondered if the principle of tiny hooks and
loops could be used to develop a new type of fastener for clothing. It took him eight
years and resulted in “Velcro” which is now used throughout the world.
George de Mestral and Velcro

20. Sources of New Ideas
• Magazines and trade journal: useful ideas about new products can be obtained
from these magazines and trade journals.
• Competitors: in order to survive in present day competitive environment, it is
in the interest of the entrepreneur to keep a eye on activities of his rivals.
• Overseas market: a producer interested in taking care of foreign market can do
it in better manner by getting right ideas aimed at improving product
acceptability in these markets.

21. Ron Hickman and the “WorkMate”
Ron Hickman was a designer for the sports car manufacturer Lotus. He was also a
keen do-it-yourself enthusiast. When his DIY activities led him to damaging items of
furniture, it gave him an idea of building a light, portable workbench that could be
folded away when not in use. Before this workbenches had been heavy, wooden and
not greatly portable. Hickman used his experience of designing suspension systems
for cars to devise a workbench that was light and strong and yet could be folded
away when not in use.

22. Ideas
• Look to the bigger picture
− Political
− Economic
− Social Cultural
− Technological
− Environmental
− Legal
Page 22

23. Ideas
• That said ideas do not have to be:
− Imaginative
− Unique
− Different
There is nothing wrong with delivering something that already exists
The key is to have a USP and a CVP
Page 23

24. New
produc
t idea
Idea
screeni
ng
Conce
pt
develo
pment
Potenti
al
analysi
s
Produc
t
develo
pment
Test
market
ing
Comm
ercializ
ation
Ideas into opportunities

25. Ideas into opportunities
1.New product idea: an attempt is made to visualize the product. An in depth
study may be undertaken to anticipate features of the proposed product. Ideas
may be contributed by scientists, professional designers, rivals, customers,
sales force etc.
2.Idea screening: under this step detailed investigation of various ideas is carried
on. Those ideas which offer less scope are dropped. Most promising ideas are
chosen for product development.
3.Concept development and testing: all ideas chosen after preliminary screening
are subjected to in depth study. These ideas are developed into mature
product concepts.
4.Business potential analysis: after choosing best product idea, detailed
investigation is carried out to find its market potential, gestation period, capital
investment, and expected rate of return.

26. Ideas into opportunities
5.Product development: after clearing business potential analysis tests concrete
steps are taken for giving practical shapes to the proposed product.
6.Test marketing: test marketing involves placing fully developed new product
for sale and observing its actual performance under propose marketing plan.
7.Commercialization: is the actual introduction of the product into market place
with all the related decisions and resources commitment.

27. Examples of innovation

28. Page 28
Note Headphones

29. Page 29
Hanger Tea

30. Page 30
Moustache Paint brushes

31. Page 31
Parmesan Pencils

32. Page 32
Origami Beer

33. Page
33
And finally
One of the leaders in design innovation

34. Evaluation
• Will it work?
• Who are the potential customers of the idea?
• What similar or unique does the idea have compared with what’s
already on the market?
− How and where will your customers purchase the product?
− What problem (point of pain) does the idea solve?
− Is something about it different?
−Price
−Quality
−Service •
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e
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35. TOP TIPS

36. Become a problem solver
Identify problems. Look for
needs, niches, conflicts,
inefficiencies and gaps that
need to be filled. Brainstorm
possible solutions. Realize
that most problems have
multiple solutions.

37. Think outside the box
Tunnel vision will get you
nowhere. Current market
and customer research
creates tunnel vision,
causing companies to
overlook the potential of
new ideas.

38. Be willing to take risks
If at first an idea doesn't
seem totally absurd, there's
no hope for it - Albert
Einstein

39. Build your confidence
Be positive. Stick to your
principles. Avoid
perfectionism. Insecurity in
your abilities can suppress
creativity, which is why it is
important to build
confidence.

40. Think smart. Move fast
Be proactive. Define goals
and objectives. Evaluate
ideas based on their impact
on a goal. Come up with a
plan to get your idea done.

41. Propose solutions
Create a proof of concept
prototype. Use your laptop
or tablet to pitch ideas and
showcase presentations.

42. Become an expert
By having a rich
understanding of the topic,
you will be better able to
think of novel or innovative
solutions to problems.

43. Share your vision
To get people to help you in
changing things, you need to
share your vision with them.